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NOTES PAYABLE - UNERELATED THIRD PARTY	9 Months Ended
May 31, 2014
Notes to Financial Statements
NOTES PAYABLE - UNRELATED THIRD PARTY	NOTE 5 – NOTES PAYABLE – UNERELATED THIRD PARTY On December 13, 2012, the Company issued a promissory note to an unrelated third party in exchange for $100,000 in cash. Under the terms of the loan, the $100,000 and interest totaling $25,000 is due and payable on or before March 12, 2013. The loan is collateralized by 100,000 shares of the Company’s restricted common stock, which are held in escrow. In consideration for the loan, the Company also issued 26,667 shares of its common stock which was valued at the shares’ fair market value at the date of issue of $72,000, which is being amortized as a loan fee over the term of the loan. The Company accrued interest expense of $21,629 and amortization expense of $62,292 for the six months ended February 28, 2013. As indicated the loan and accrued interest was not paid and the 100,000 shares were released from escrow in full settlement of the $125,000 balance due. On March 12, 2013, the Company recognized a net gain on the settlement of the debt of $65,000, the difference between the fair value of 100,000 shares which was $60,000 on date of issuance and the total indebtedness owed.

NOTES PAYABLE - UNERELATED THIRD PARTY

9 Months Ended

May 31, 2014

NOTE 5 – NOTES PAYABLE – UNERELATED THIRD PARTY

On December 13, 2012, the Company issued a promissory note to an unrelated third party in exchange for $100,000 in cash. Under the terms of the loan, the $100,000 and interest totaling $25,000 is due and payable on or before March 12, 2013. The loan is collateralized by 100,000 shares of the Company’s restricted common stock, which are held in escrow. In consideration for the loan, the Company also issued 26,667 shares of its common stock which was valued at the shares’ fair market value at the date of issue of $72,000, which is being amortized as a loan fee over the term of the loan.

The Company accrued interest expense of $21,629 and amortization expense of $62,292 for the six months ended February 28, 2013. As indicated the loan and accrued interest was not paid and the 100,000 shares were released from escrow in full settlement of the $125,000 balance due. On March 12, 2013, the Company recognized a net gain on the settlement of the debt of $65,000, the difference between the fair value of 100,000 shares which was $60,000 on date of issuance and the total indebtedness owed.